Early contract termination due to lack of funding

[boozyjambo]

Hi,

First time posting on here. Been contracting since 2006 with very few problems (maybe I've been lucky to get this far!), but have an issue with my current contract.

I've been advised (verbally) that my original contract to the 29th July will not be honoured and that I will instead be finishing on the 8th July. When I spoke to the client they advised that this was because funding for the project (effectively this equates to paying me) was no longer available. Given that I was advised at interview stage that there was a very strong probability of an extension after the initial 3 months (I will be 3 weeks short of 3 months with this new end date) and took the job in good faith that the contract I was accepting would be honoured - I had another offer on the table at the time - where do I stand legally?

I have a week's notice period in my contract, but have to date received no written notice of contract termination. The client appears to be under the impression that I started on the 13th April and that they have honoured the 3 months, however I didn't start - at their request - until the 27th April and my contract reflects this.

Ideally I would like the client to honour the original contract, as their budgetary mistakes should not affect me. If, however, they are unprepared to do this, what action is available for me to take?

The client is *not* a small company.

[Kanye]

You have no complaint and no comeback at all from what I can see.

They don't owe you an extension after 3 months even if they swore on the life of their first born. The agreement was for 3 months only with no obligation on either side after that.

And even within that 3 months, they've observed the 1 week notice period and done things correctly.

Dust yourself off lad and move on to the next one..... They have done nothing wrong at all. This is just the nature of contracting!

[jmo21]

WKS.

Always assume a contract length is only ever as long your notice period, and sometimes you won't even get that as there may be no work to do and there is no MOO.

This flexibility is part of why we are useful to our clients and why we get paid higher day rates than permies.

[russell]

WKS.

Always assume a contract length is only ever as long your notice period, and sometimes you won't even get that as there may be no work to do and there is no MOO.

This flexibility is part of why we are useful to our clients and why we get paid higher day rates than permies.

I agree, all you should hope for is that after each days work you do, you get paid for it.

This is why I laugh at agents who try and get your rate down by saying "You will provably be there a long time"

[boozyjambo]

My argument isn't that they haven't given me the requisite notice, it's that we entered into an agreement for a set length of time that they obviously didn't have funding for. Surely they are then in breach of that contract if they have failed to account for it? I had other options available at the time and in the last couple of weeks have turned down a considerably better paid contract (which would have meant relocating, but I would be prepared to do that knowing what I know now), only to have them turn round and drop this bombshell on me (additionally, I had to pre-empt the contract conversation, even though they'd clearly known about it for some time).

[contractoralan]

Its been said, but let me try again.

The client agreed for a 3 months contract verbally. The client provided a written document confirming the 3 months contract, but also included a notice period. You signed it, which means you agreed to the new terms. End of.

There is no breach. Get over it. Good luck with your search for new contract.

My argument isn't that they haven't given me the requisite notice, it's that we entered into an agreement for a set length of time that they obviously didn't have funding for. Surely they are then in breach of that contract if they have failed to account for it? I had other options available at the time and in the last couple of weeks have turned down a considerably better paid contract (which would have meant relocating, but I would be prepared to do that knowing what I know now), only to have them turn round and drop this bombshell on me (additionally, I had to pre-empt the contract conversation, even though they'd clearly known about it for some time).

[russell]

My argument isn't that they haven't given me the requisite notice, it's that we entered into an agreement for a set length of time that they obviously didn't have funding for. Surely they are then in breach of that contract if they have failed to account for it? I had other options available at the time and in the last couple of weeks have turned down a considerably better paid contract (which would have meant relocating, but I would be prepared to do that knowing what I know now), only to have them turn round and drop this bombshell on me (additionally, I had to pre-empt the contract conversation, even though they'd clearly known about it for some time).

Your contract is only as good as your notice period. The sooner you realise that the better you will cope as a contractor.

[TykeMerc]

My argument isn't that they haven't given me the requisite notice, it's that we entered into an agreement for a set length of time that they obviously didn't have funding for. Surely they are then in breach of that contract if they have failed to account for it? I had other options available at the time and in the last couple of weeks have turned down a considerably better paid contract (which would have meant relocating, but I would be prepared to do that knowing what I know now), only to have them turn round and drop this bombshell on me (additionally, I had to pre-empt the contract conversation, even though they'd clearly known about it for some time).

No breach of contract (or faith for that matter), they've run out of money to fund you as a contract resource and at least they've been up front and decent enough to tell you. Many clients would have fabricated some cobblers about poor quality of work or a mythical stakeholder complaint and binned you instantly.
Unless your contract is worded in a very IR35 unfriendly way then they have no obligation to provide work, they've given the contracted notice (admittedly they should do that via any agency involved, but that's just red tape) and to be honest they've behaved pretty well by giving you notice. It's not like they've stopped the contract way before the contract end.

[cojak]

Your contract is only as good as your notice period. The sooner you realise that the better you will cope as a contractor.

WRS

And it's so important I think it's worth repeating...

Your contract is only as good as your notice period. The sooner you realise that the better you will cope as a contractor.

[northernladuk]

Your contract is only as good as your notice period. The sooner you realise that the better you will cope as a contractor.

and as we have seen over the last week from a number of posters the notice period can also be a bit of waste of time as well so don't bank on it.